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Interview: Scott Kriens of Juniper Networks

01 July 2008

Telecoms operators know their customers better than anyone else, says Juniper CEO Scott Kriens, and they can use that information to challenge the internet-based content companies and others that are competing against the traditional service providers

Scott Kriens: relentless pressure on cost and
optimisation

It's tough being a service provider, but Scott Kriens, founder
and CEO of equipment vendor Juniper, is confident that some of
his customers have significant advantages in the
marketplace.
They're competing against a range of companies that are
offering new broadband services, yet the traditional operators
have something that the newcomers do not have, says
Kriens.
They're actually the only service provider that is directly
connected, he points out. "Everyone else depends on the
customer coming to find them, and the traditional service
provider is the only player who actually goes out and connects
himself to the customer," he says.
"There's a huge opportunity for traditional service providers
to take advantage of the fact that they are directly physically
connected to the customer," says Kriens, who has let Juniper
Networks since helping to set it up in 1996.

Scott Kriens

Chairman and CEO of Juniper Networks, which he
founded in 1996
Bachelor's degree in economics from California State
University, Hayward
Product management and marketing roles for Tandem
Computers
Management positions at Burroughs
Co-founded StrataCom in 1986 and served as VP of sales
and operations
Appointed by US president to National Security
Telecommunications Advisory Committee
Serves on the board of directors of VeriSign and
Equinix

Service providers should "get to know their customers better,
and then take the value of that relationship and leverage it
with other providers in order to create a better experience",
he adds. There is a great opportunity to learn about the
customer and what they want, "and then to take those
requirements out into the marketplace of content and
information and connect the two".
Service providers need to get away from the idea that they're
just a utility, he says. "There is an issue of privacy", but
there is a real value in the information they have about
customers — and they can gather more, with customers'
permission, in exchange for appropriate deals, such as cheaper
services.
He quotes an example: if a customer is willing to share the
information that they're planning to buy a car in the next
three months, they can receive targeted information. Kriens
says the service provider should say: "In return for sharing
with us your interests we will give you a different rate of
service."

Community of users

In this way the service provider will have a community of
users who are going to be in the market for a car in the next
90 days. From a car company's point of view having a list of
potential customers will be worth more than paying to blast
everyone with advertising, without knowing who's interested and
who isn't.
"And the person receiving them wants to see ads about cars,
because they're trying to figure out how to buy one. There's an
opportunity to connect some dots that would create some value
for everyone."
Which operators does he admire most for what they have done,
not necessarily in advertising but in delivering new services
to customers?
"One of the most advanced in the marketplace is PCCW in Hong
Kong. They're sponsoring home shopping, they're putting up
interactive gaming, with video gaming and gambling, which they
can do in Hong Kong. What this is translating to is a huge
variety of service propositions for the customer, most of it
available in their homes or on their mobile devices," he
explains.

Pick up and use

"They have some fantastic stuff," he adds, praising PCCW's
chief technology officer, Paul Berriman, for his vision. "They
do a good job of synchronising the various technologies and
producing something that's very simple for people to pick up
and use. We've had a very good relationship with them for a
number of years."
One of Juniper's main concerns is what he calls "the
high-performance network", which will have three primary
attributes: "they're fast, they're very reliable and they're
secure — and all of that translates into economics
that are very attractive".
That will reduce the cost of capital expenditure and the
operating cost, "by consolidating the number of networks, by
delivering dual infrastructures or virtual segmentation in
those networks so you can run multiple different services from
a single point of control."
That's a fundamental requirement, he says. "There's relentless
pressure on cost and optimisation." Though there are the long
"to help balance the economics so that it doesn't all depend on
waiting for this value to be realised", he says. "There are
some short-term things to be done that help us get to where we
want to go."
Unlike many traditional vendors, Juniper has not moved into
managed services, with the exception of some deals in managed
security that it has signed with TeliaSonera and others.
"From our point of view the services business and the managed
services business is quite different from the innovation
business," says Kriens. "What we're interested in doing is
innovating with state of the art technology and then
cooperating with those who have the kind of workforce and
business model around service management."

Competitive industry

Which leads naturally on to innovation itself. It's a
fiercely competitive industry. How does Juniper manage to spend
enough to innovate at the right speed?
"By having a considerable amount of money to spend," says
Kriens. "We spent over $600 million last year and will spend
more than that this year, and we are doing it with laser focus
on high-performance networking."
That will be the focus in the next couple of years: "A
combination of intelligence and performance at scale —
and all three of those dimensions without compromise," he says.
Normally if you want intelligence, the traffic has to go slow,
he explains, and if the traffic has to be fast, then "you can't
look as deeply into it".
And if you want high performance and high intelligence at scale
"it becomes very dangerous", Kriens adds.
"We're spending about as much as anybody, and we have 12 years
of learning behind what we do. We know some things that aren't
knowable until they've been done. We're awfully focussed and
we're learned a great deal. The spending we're doing is giving
a lot of leverage," he says.

Customer knowledge

"What we're providing is the infrastructure and the
intelligence that can make the delivery possible. There has to
be knowledge of the customers and we provide the network
intelligence and the infrastructure that allows you to do that,
without compromising the performance of the network in the
process."
A few years ago Juniper was instrumental in creating IPSphere,
an organisation set up to promote a new set of standards for
high-performance use of the internet.
"We nurtured it into existence in the first place but we are
only one of many members," says Kriens.
"What they've done is build an architecture around how to
enable this type of thing to happen. It's a business model with
a network designed behind it, so that people with content and
information to share can advertise themselves, and the network
itself can become seamless across multiple boundaries."
It's not unlike what happens in the traditional voice area when
you pick up a telephone in the US and make a call to the UK.
The industry has long had standards over connecting and paying
for the call. Now, the says, a similar set of arrangements is
needed for IP traffic.
"If I have a high-priority connection, if it's a guaranteed
high bandwidth on a connection that initiates in one territory
and terminates in another, how do you make sure that's seamless
and that there's a simple settlement out of it?"
That's the point of IPSphere, says Kriens. There are operators
and equipment providers in the organisation: operators such as
BT, NTT and Verizon; vendors such as Cisco, Huawei and Tellabs
as well as Juniper.
Is he pleased with the outcome and has Juniper earned business
benefits? "It's very long term, as the design of the
infrastructure has to be agreed upon and then has to be
implemented across more than one operator: all those are in the
critical path before we see an obvious benefit. It's a long
road and it takes a lot of effort and support."
But structurally it is important to do, says Kriens. "There's
progress but a lot of work to do." GTB

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